Plenty of land and fewer rules make Sioux Falls one of the best places to be in the apartment-building business.

There is lots of demand for rental housing in this market, given the four-county metro area’s steady population gains.

Thankfully, Sioux Falls developers should have a clearer path than others when it comes to supplying new families with a roof over their head, according to a recent report commissioned by national interest groups.

“The fact that it is easy to build in Sioux Falls bodes well for the people who are trying to meet that demand,” said Brian Majerus, president of the South Dakota Multi-Housing Association.

Lack of red tape, along with the amount of land available to developers on the outskirts of Sioux Falls, make the metro one of the easiest places to build apartments, according to the report.

The Sioux Falls metro area, which includes Minnehaha, Lincoln, Turner and McCook counties ranked 10th in an analysis of 50 metros in the United States. The report from Hoyt Advisory Services was commissioned by the National Multifamily Housing Council and the National Apartment Association.

The study, which also projected demand, estimates the Sioux Falls metro will add about 5,000 new apartment households by 2030.

Building units for those households should be much easier here than in bigger cities such as Los Angeles, said Michael Dinn, who helped with the report.

“Yours is also the smallest metro market we looked at in terms of renters,” Dinn said.

That Sioux Falls, with plenty of room to grow its boundaries, has ample supply of real estate for apartments is no surprise.

But how did researchers measure red tape here and compare it with other communities?

Local building rules were assessed and scored by Hoyt with help from a 2007 index pioneered by the Wharton School at the University of Pennsylvania. Researchers used a series of different data points to analyze and compare Sioux Falls’ building rules, including zoning rules, the amount of time it takes to process building permits, how many boards and government bodies an application has to go through and the amount of political activity or rule-making dedicated to changing building regulations.

“What you want is a set of rules that you understand and they stay the same,” said Joel Dykstra, CEO of developer RMB Associates. “I think the City of Sioux Falls does a very good job of explaining what those rules are, living up to those rules and playing them consistently.”

There has been a flurry of activity in recent years in Sioux Falls’ rental housing market. Building permits for multi-family housing have continued to increase in the city. The trend comes with massive projects near the outskirts, such as the partially completed Graystone Heights apartment community, which add hundreds of units at a time.

When it comes to deciding where to build, demand is more important than regulations or available land, Dykstra said. And Sioux Falls has plenty of demand.

“We’re not building them as a monument, they have to make money,” Dykstra said. “Tenants have to feel like they’re getting good value.”